Acting Blue Cross CEO looks to emphasize integrity

Posted:
Saturday, November 20, 2004 12:00 am

Marion Davis

James E. Purcell

Position: Acting president and CEO, Blue Cross & Blue Shield of Rhode Island
Background: Purcell, chief operating officer of Blue Cross since 2000, was named acting CEO and president in May and is now a finalist for the permanent job. An upstate New York native and Vietnam veteran, Purcell was a founding partner of the Providence law firm Partridge Snow & Hahn, and served as outside counsel to Blue Cross since the 1980s. He has also chaired the Barrington Republican Town Committee and served on the town’s zoning board. He is a trustee of the Greater Providence Chamber of Commerce.

Education: Bachelor’s degree from Cornell University, 1967; law degree from Boston University School of Law, 1974.

Residence: Barrington

Age: 59

A Rhode Island institution for three generations, Blue Cross & Blue Shield of Rhode Island has seen its reputation tarnished by controversy over its former CEO, Ronald Battista, perks to board members, its political maneuvering and soaring premiums. Purcell’s job is to repair the damage – no small challenge given the state’s growing health care cost crisis and Blue Cross’ recent loss of its single biggest account, the state employees and retirees contract.

PBN: You took over at a very tumultuous time for Blue Cross. What’s your role now as acting CEO?

PURCELL: My role is to get the company back on track. Much of what happened is not so much what Blue Cross did, but how it did it. As CEO, I’ve been using a much more collaborative approach. One of my top agendas is to have a very good working relationship with the physicians and other providers, obviously something that was a problem before. And I will be emphasizing integrity and ethical conduct. My job is to try to lead Blue Cross to a place where it’s respected and trusted. That’s going to take some time, but hopefully I can lead by example.

PBN: How much do you feel Blue Cross’ reputation has been tarnished, and to what extent is the criticism legitimate?

PURCELL: I do think Blue Cross’ reputation has been tarnished; it’s impossible not to say it has. Though, again, it’s not so much what was done but how it was done.

PBN: What do you mean by that?

PURCELL: Nothing that happened thus far was illegal, criminal. It was completely disclosed, it was approved, and it was filed with the regulators. Leave aside the issue with the bricks for the moment. There was nothing illegal, but it bothered people, because they had a certain view of our nonprofit charitable status that didn’t jibe with what they saw.
PBN: Is the public perception of what it means for you to be a nonprofit realistic?

PURCELL: It’s hard for me to tell what the public perception is, because there’s nobody that’s put it down in writing. The public perception is a series of reactions to specific events. Blue Cross is still the largest health insurer in the state. Its size and the important role that it plays demand that we operate as efficiently and effectively as a for-profit. But I do think we have responsibilities that extend beyond for-profits. We have responsibilities to the entire health care system.

PBN: You’ve said a big part of why Rhode Island’s health costs are soaring is because of subscriber behavior. It was perceived as blame-the-victim or denigrating Rhode Islanders. Is Rhode Island an unusually unhealthy state?

PURCELL: I don’t think it’s unusually unhealthy. But to claim that people’s lifestyles aren’t the primary driver of health expenses is to put your head in the sand. It just simply is – a tremendous percentage of claims expense each year arise out of our lifestyle: obesity, diabetes, alcohol use, smoking. The list goes on and on; it’s absolutely irrefutable. It’s not a question of assigning blame; it’s a question of where we’re going to focus our activities to try to solve the problem of affordability, because affordability is the biggest problem.

PBN: How much is utilization increasing?

PURCELL: For the last three or four years, it has increased at a rate between 10 and 15 percent a year. Add to that fee increases and price increases, and you can understand why rates are going up 12, 15 and 18 percent.

PBN: Is it a matter of people being 10 percent sicker, shall we say, or is it that the treatment for different things is more expensive?

PURCELL: It’s both. Of course the technology today is unlike what it was 10 years ago. It’s extremely expensive, but it’s appropriate. MRIs and PET scans and CAT scans have brought us the ability to diagnose things we never had before. That’s very important. And the cost of drugs … some drugs improve the quality of life dramatically, but they come at a cost.

PBN: A lot of people say Rhode Island’s biggest problem in health care is the lack of competition. Do you think competition would help in Rhode Island?

PURCELL: I think competition helps keep you on your toes, and operate a little bit more leanly. UnitedHealthcare is right now the largest health insurer in the United States; they are a formidable competitor, as you could see with the state of Rhode Island account. I think having a competitor like United helps us be better.

PBN: How big a deal is losing the state employee contract?

PURCELL: We’ve taken it to court because based upon everything that I’ve seen, we do have the best bid. I understand the standards of review in cases like this are pretty severe, but we felt we owed it to ourselves and to our subscribers and to the state employees who would prefer to have Blue Cross coverage. If we lose the account, fortunately we are financially secure and our enrollment is as high as it’s ever been, so we’ll do OK. But I won’t minimize the fact that it hurts us. We’ve always insured those people.

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